U.S. federal and state grants for start-up businesses are generally hard to find. But one area where new businesses can acquire grants and significant tax credits is in energy. If a business can show it has a new process or product that can conserve energy or make use of renewable energy, it has a good chance for a grant, though competition for such awards can be highly competitive.
- The U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE) funds research and development in renewable energy and energy efficiency. The office notes an example of the project it funds could include research to improve the efficiency of photovoltaic cells. In fiscal year 2007, EERE reported it awarded $574 million in financial assistance. The DOE's website gives a thorough breakdown of the process it uses to award grants and financial assistance (see Resources).
- The DOE offers three types of grants to businesses: grants set aside for small businesses; general competitive grants; and awards for unsolicited proposals.
All grants are listed on the federal website clearing house for grants (see Resources). While the majority of grants dealing with energy come from the DOE, other departments, such as Commerce or Housing and Urban Development, may also list grants with energy components.
The technical requirements and expertise for these grants vary. Research grants might require highly involved scientific processes, while development grants depend more on business' techniques and acumen that encourages energy conservation and renewable energy use in the marketplace. - The DOE participates with the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs in which federal agencies "with large research and development budgets set aside a small fraction of their funding for competitions among small businesses only." The DOE reports that in 2005 it awarded $102 million through SBIR, and $12 million through STTR.
Each year around the beginning of October, the DOE issues invitations for small businesses to apply for SBIR/STTR Phase I grants, which "explore the feasibility of innovative concepts" for specified energy topics. Awards can be up to $100,000 for nine months. Phase II grants, open only to winners in Phase I, can receive up to $750,000 over two years for principal research and development. - Most of the financial assistance EERE awards to businesses of any size, as well as to industries, universities and others, come through competitive grants. The office solicits applications in specific program areas (see Resources). Though most of the federal energy grants are not specifically for start-up businesses, the proposals often seek new technologies and techniques that new businesses may be advancing.
- While the majority of grants are awarded through a competitive process, EERE does maintain an "unsolicited proposal program." If your business is developing a new idea for conserving or producing energy, you don't have to wait for a grant program for which it can qualify before requesting funding.
Unsolicited proposals, however, are not the norm. A new business can improve its chances of having its proposal funded by responding to a Notice of Program Interest (NOPI). While not actually solicitations, NOPIs alert businesses and other possible applicants of those areas of research in which EERE is interested and more likely to fund (see Resources).
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